Once again, the FX market has shown a greater degree of confidence on Thursday with risk appetite continuing to surge as the market flows back into riskier and higher yielding currencies. We have however seen some USD bids into the London fix following the much weaker Philly Fed.


Once again, the FX market has shown a greater degree of confidence on Thursday with risk appetite continuing to surge as the market flows back into riskier and higher yielding currencies. Global equity price action has diverged, and as it stands, US stocks are only trading flat on the day. We have however been seeing some carry selling into the London fix that has given the USD a better bid tone over the past hour. Shockingly bad Philly Fed data has been attributed to the latest USD buying after coming in at -41.3, the lowest level since 1990. It remains to be seen at this point whether we are in the process of a more significant rebound in the Euro, or are merely undergoing a minor corrective bounce. Looking ahead, Fed Lockhart is slated to speak at 18:15GMT.

Nok/Jpy - The latest setbacks were well propped by rising inter-day trend-line support off of the 12.1765 (15Jan low) trend lows at 13.0690 on Tuesday, and the market continues to show signs of a material base in the process of carving its way out on the daily chart. The market has now broken back above the 100-Day SMA for the first time since August 2008, and this could be warning of a shift in the trend.


Eur/Aud - The very prominent rally over the past several months has been very well supported ahead of the 100-Day SMA, but the cross has now been attempting to break back below the latter over the past few weeks and once again looks set for a close below. With the market now confined to a choppy range trade, as the overriding trend defers to consolidation, a close back below the 100-Day SMA on Thursday will confirm the likelihood for additional setbacks, and should expose the recent trend lows at 1.9020 (6Feb low) over the coming days. Next support now comes in by 1.9395 (13Feb low), and we look for an acceleration to retest 1.9020 on a break of the latter. Ultimately, only back above 1.9890 (11Feb high) would negate bearish outlook. 




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